Intel has a press release announcing its acquisition of Fulcrum Microsystems.

“Intel is transforming from a leading server technology company to a comprehensive data center provider that offers computing, storage and networking building blocks,” said Kirk Skaugen, Intel vice president and general manager, Data Center Group. “Fulcrum Microsystems’ switch silicon, already recognized for high performance and low latency, complements Intel’s leading processors and Ethernet controllers, and will deliver our customers new levels of performance and energy efficiency while improving their economics of cloud service delivery.”

10 Gigabit Ethernet (10GbE) networks are one of the fastest-growing market segments in the data center today. As demand for data continues to increase, there is a growing need for high-performance, low-latency network switches to support evolving cloud architectures and the growth of converged networks in the enterprise. Fulcrum Microsystems designs integrated, standards-based 10GbE and 40 Gigabit Ethernet (40GbE) switch silicon that have low latency and workload balancing capabilities while helping provide superior network speeds.

What is part of Intel's motivation?

Cloud computing is driving the convergence of server, storage and network technologies and solutions based around Intel® Xeon® processor solutions.

A future with Intel Xeon's at the center, and Intel setting the performance standard for the converged infrastructure - server, storage and network.

Here is a post by Rob Enderle on what he observed.

A few years ago, I attended an Intel Labs presentation and one of the more interesting segments was on a technology it was quietly developing for large network switches. Intel argued that it could do to the very expensive and high-margin switch business what it did to UNIX servers over the last two decades to cut costs dramatically.

Apparently, Intel has now started executing on that strategy with the acquisition of Fulcrum Microsystems, a fabless semiconductor and related software vendor, targeting low-cost, high-performance, high-end switches.

This will be good news for HP, but bad news for Cisco. Let me explain.